Fuchs & Bergh, Inc. v Lance Enters., Inc.
Annotate this CaseDecided on August 24, 2004
Supreme Court, Suffolk County
FUCHS & BERGH, INC. d/b/a LITTLE SWITZERLAND DOLLS, LILLY BERGH and JOHN BERGH, Plaintiffs,
against
LANCE ENTERPRISES, INC. d/b/a LARRY & ANCEWICZ and LARRY'S FUEL, INC. d/b/a LARRY'S FUEL, ANDY HOFFMAN and ANDY HOFFMAN BURNER SERVICE, INC. , Defendants.
00-6606
JEFFREY A. SUNSHINE, P.C.
Attorneys for Plaintiff 5 Dakota Drive, Suite 204
Lake Success, New York 11042
FAUST GOETZ SCHENKER & BLEE
Attorneys for Defendants/3rd Party Plaintiffs
Two Rector Street, 20th Floor
New York, New York 10006
FISCHBEIN BADILLO WAGNER HARDING
Attorneys for 3rd Party Defendants
48 South Service Road, Suite 300
Melville, New York 11747
Peter Fox Cohalan, J.
ORDERED that this motion by defendants/third-party defendants Andy Hoffman and Andy Hoffman Burner Service, Inc. for an order pursuant to CPLR 3212 granting summary judgment dismissing the complaint and third-party complaint and for the imposition of sanctions pursuant to 22 NYCRR § 130-1.1 and an award of costs and fees is determined herein; and it is further
ORDERED that this cross-motion by plaintiffs for an order pursuant to CPLR 3212 and Navigation Law § 181 granting plaintiffs summary judgment on the issue of liability is denied; and it is further
ORDERED that this cross-motion by defendant Lance Enterprises, Inc. d/b/a Larry Ancewicz and Larry's Fuel, Inc. d/b/a Larry's Fuel for an order pursuant to CPLR 3212 granting defendants partial summary judgment and dismissal of plaintiffs' Navigation Law claim is denied.
Plaintiffs commenced this action to recover damages for alleged injury to property and loss of inventory on December 15, 1998 as a result of an oil spill in the basement of their collectable and antique doll store located at 267 Main Street in Huntington, New York. The oil spill allegedly occurred when one of the store's two 275-gallon oil storage tanks, Tank No. 1, was overfilled during a heating oil delivery by non-party John Rathgaber (Rathgaber), an employee of defendants Lance Enterprises, Inc. d/b/a Larry Ancewicz and Larry's Fuel, Inc. d/b/a Larry's Fuel (Lance). Defendant Andy Hoffman, president of defendant Andy Hoffman Burner Service, Inc. (Hoffman), provided oil burner and boiler repair service based on a relationship with Ancewicz' [*2]company. Following the subject incident, the insurer for defendants Lance notified non-party Ambrose Environmental Management (Ambrose), which arranged for non-party Trade-Winds Environmental Restoration Inc. (Trade-Winds) to perform remediation and restoration work. Trade-Winds arrived on the premises on December 17, 1998, cut and removed Tank No. 1 two days later, and installed a new tank in its place on January 6, 1999.
By their amended complaint, plaintiffs allege that defendants were obligated pursuant to contract to deliver heating oil to the subject premises and were negligent in their delivery, resulting in lost profits, damages to improvements, and business interruption; that defendants are strictly liable for damages due to discharge of petroleum products into the soil at and around the premises in violation of Navigation Law § 181; that the value of the subject premises has diminished by the assignment of a spill number following the filing of a report by the Department of Environmental Conservation, indicating contamination by #2 fuel oil; and that as a result of the discharge of oil, plaintiffs were required to incur cleanup costs.
Defendants Hoffman answered, denying that they were a party to any contract for the delivery of heating oil to plaintiffs and asserting affirmative defenses, including that the amended complaint failed to state a cause of action; that defendant Andy Hoffman is not personally liable because he acted in his capacity as an officer of the corporation; that plaintiffs' property damage was not proximately caused by the acts or omissions of defendants Hoffman; and that defendant Andy Hoffman was not a "person who discharged" petroleum pursuant to Navigation Law § 181 or a "person responsible for causing a discharge" pursuant to Navigation Law § 175. In addition, defendants Hoffman cross-claimed against defendants Lance for contribution and indemnification.
By their answer, defendants Lance assert general denials and affirmative defenses, including failure to state a claim and failure to mitigate damages. In addition, defendants Lance assert a cross-claim against defendants Hoffman for contribution and indemnification. Defendants Lance also commenced a third-party action against defendants Hoffman for contractual and common-law indemnification, alleging that defendants Hoffman caused the alleged damage by negligently maintaining, servicing and repairing plaintiffs' oil burner and failed to notice a small leak from a pipe connected to the oil tank or that the bottom of the subject oil tank had been patched with fiberglass rather than replaced. The note of issue in this action was filed on June 9, 2003.
Defendants Hoffman now move for summary judgment dismissing the complaint and third-party complaint on the grounds that they did not cause any property damage because defendants Hoffman never delivered oil to the subject premises; that there was no contract requiring Hoffman to indemnify Lance; that Andy Hoffman cannot be individually liable since he operated his business through the corporation; and that plaintiffs and Lance spoliated key evidence by removing the subject tank and destroying it, thereby preventing defendants Hoffman from defending themselves against allegations that they failed to observe that the tank was patched or that Hoffman's service to the burner caused the tank to overfill. In addition, [*3]defendants Hoffman seek the imposition of sanctions pursuant to 22 NYCRR §130-1.1 and an award of costs and fees. In support of the motion, defendants Hoffman submit the affidavit of Andy Hoffman; the pleadings; portions of the deposition transcripts of plaintiff Lily Bergh, Ancewicz, and Rathgaber; the deposition transcript of Andy Hoffman; the First Set of Interrogatories of defendants Hoffman and the Response to First Set of Interrogatories by Lance; plaintiffs' Response to Demands and correspondence of counsel.
Plaintiffs now cross-move for summary judgment on the issue of liability and for a determination that defendants are strictly liable under Navigation Law §181. In support of the cross-motion, plaintiffs submit the individual plaintiffs' affidavits; portions of the deposition transcript of plaintiff Lily Bergh; and the deposition transcripts of Ancewicz, Hoffman, and Rathgaber.
Defendants Lance now cross-move for partial summary judgment and dismissal of plaintiffs' Navigation Law claim on the grounds that plaintiffs caused the alleged discharge by plaintiffs' failure to repair long-time oil leaks from one of the tanks, which leaks were discovered by Trade-Winds on January 7, 1999, when its employees were installing the plumbing for the installation of a new oil storage tank to replace storage Tank No. 1. In support of their cross-motion, defendants Lance submit, inter alia, the job file of Trade-Winds and the reports of Ambrose with respect to plaintiffs' store; the affidavits of Larry Vetter, a foreman for Trade-Winds at the time of this incident, and of Frank "Red" Harris, an employee of Ambrose; and two color photographs of the new tank and Tank No. 2.
Article 12 of the Navigation Law, commonly known as the Oil Spill Act, was enacted to ensure swift, effective cleanup of petroleum spills that threaten the environment (Navigation Law §§ 170, 171). Pursuant to Navigation Law § 181 (1), "[a]ny person who has discharged petroleum shall be strictly liable, without regard to fault, for all cleanup and removal costs and all direct and indirect damages, no matter by whom sustained as defined in this section." Navigation Law § 172 (8) defines "discharge" as "any intentional or unintentional action or omission resulting in the releasing, spilling, leaking, pumping, pouring, emitting, emptying or dumping of petroleum *** onto lands from which it might flow or drain into said waters ***" Navigation Law § 172 (15) defines "petroleum" as "oil or petroleum of any kind and in any form ***"
Rathgaber testified at his deposition that when he arrived at the subject premises between 6:30 a.m. and 6:45 a.m. on December 15, 1998, the store was closed and he did not see anyone; that he was aware from prior deliveries that the whistle for one of the tanks did not work so he leaned next to the vent pipe to hear a gurgling sound, indicating that the tank and pipes are full of oil; and that oil began coming out of the vent seconds after he attached the hose to the first fill pipe in front of the store and about a quart of oil spilled on the sidewalk in front of the store. In addition, Rathgaber testified that he then filled Tank No. 2 without incident, put Speedy-Dry down on the spill on the sidewalk, called and informed Ancewicz, spoke to no one from the store which was locked, and left for the next delivery. According to Rathgaber, when he later returned to the store and went down to the basement, he saw that one tank was wet from oil on the top and [*4]the side and that there was a little oil on the floor over which he put Speedy-Dry. Rathgaber further testified that he never told the owners prior to this incident that one of the whistles was not working and is unaware if he made any written notation but that upon informing plaintiff Lily Bergh after the incident, she stated that she knew that one of the whistles did not work and asked him why he had filled that tank which heated the second floor.
At her deposition, plaintiff Lily Bergh testified that she ran out of oil prior to this incident and called Ancewicz who sent Rathgaber and that she was present at the store when Rathgaber made the subject oil delivery; that she heard the whistle and saw Rathgaber running in a nervous manner and that Rathgaber told her that he did not hear the whistle; that she went to the basement and observed oil coming out of the red valve on top of the left tank (Tank No. 1) and on the floor and that she remained in the basement for about 10 minutes. In addition, plaintiff testified that she did not see any oil on the floor underneath the two oil tanks prior to this incident. Plaintiff also testified that she did not move any merchandise in the basement prior to the cleanup by Trade Winds and that the tank was cut in half and removed from the store.
Ancewicz testified at his deposition that under the oral agreement between defendants Lance and plaintiffs, plaintiffs had "automatic delivery," meaning that defendants Lance were to keep both tanks filled on a regular basis. In addition, Ancewicz testified that he had never inspected the equipment or the oil tanks or the hookup pipes to the oil tanks in the store; that he never inquired about or was notified of their condition; that he has never been in the basement of the store; that his son went down to the basement the afternoon after the incident; and that he did not keep maintenance records of plaintiffs' equipment in his office.
During his deposition, defendant Hoffman testified that he did not inspect plaintiffs' oil tanks prior to the subject incident; that his business was limited to oil burner and boiler repairs; that he had no knowledge of whether the tank whistles worked; and that after the incident he checked the oil tanks and saw oil on the floor and that oil had leaked from the top of the tank where the gauge was and had run down the side. In addition, defendant Hoffman testified that he did not notice a patch on the tank and never discussed with plaintiffs prior to this incident the condition of or removal or repair of the tanks.
The affidavit of Larry Vetter states that "[o]n December 18, 1998, I discovered a leak at the base of one of the plaintiffs' oil storage tanks"; "[d]uring the installation of the plumbing [on January 7, 1999] I observed that a plastic bucket had been placed underneath the leak to catch the leaking oil"; and that "after an oil storage tank was removed, I was able to observe several oil stains on the surface of the floor in the basement underneath the tank that had been removed." Vetter continues, "[t]he color, type and size of these stains demonstrated that the leaks existed for a significant period prior to December 15, 1998." In addition, he states that "a leak was identified in the copper line that transported oil from the storage tank to the furnace," which "was not identified earlier because the location of the leak was concealed by the plaintiffs' inventory." The affidavit of Frank "Red" Harris similarly states that "[b]ased on the size of the oil stains and the dark color of these stains I was able to conclude that the oil tank, which had been [*5]removed, had a leak and had been discharging oil" and "a leak was found in the copper line that transported oil from the storage tank to the furnace" and "[t]he deterioration and color of the feeder line where the leak was located clearly demonstrate that the leak existed prior" to the subject incident.
With respect to the motion, the Court dismisses the third-party claims for contractual indemnification inasmuch as the Response to First Set of Interrogatories by Lance expressly states that there was no contract between Lance and defendants Hoffman. The Court declines to sanction plaintiffs for spoliation of evidence inasmuch as they were not responsible for the discarding of the oil tank by the remediation company hired by the insurers of defendants Lance and were prejudiced along with defendants Hoffman by its destruction shortly after the incident (see, McLaughlin v Brouillet, 289 AD2d 461, 735 NYS2d 154 [2d Dept 2001]). While sanctions may be imposed for negligent or intentional destruction of evidence, the imposition of sanctions is inappropriate here (see, id; see also, Ifraimov v Phoenix Indus. Gas, LLC, 4 AD3d 332, 772 NYS2d 78 [2d Dept 2004]). In any event, the evidence adduced by defendants Hoffman indicates that they never delivered oil to plaintiffs' premises; their service was limited to the oil burner and boilers and not to oil tanks; and the oil burners were located in a room separate from and seventy feet away from the storage tanks. Defendants Hoffman have thereby demonstrated that they are not liable for the alleged negligent delivery of oil that caused plaintiffs' property damage and are not liable under the Navigation Law inasmuch as they neither caused nor contributed to the oil discharge nor possessed some ability to anticipate and prevent the discharge (see, State v Cronin, 186 Misc 2d 809, 717 NYS2d 828 [2000]).
In their opposition to the motion, defendants Lance point to conflicting testimony from Ancewicz and Hoffman regarding whether Hoffman was aware of the existence of a patch on Tank No. 1 prior to this incident. Hoffman testified that he did not inspect plaintiff's oil tanks prior to this incident and afterwards was called to the premises and noticed that oil had leaked from the top and run down the side of one of the tanks but saw no patching. Ancewicz testified that a day or two after this incident Hoffman told Ancewicz that the tank had been patched and should have been replaced a long time ago and that plaintiff had "fiberglassed" the tank. The conflicting testimony in and of itself fails to raise a question of fact inasmuch as defendants Lance failed to establish the relevance of the alleged patch on the bottom of Tank No. 1 to the subject oil spill from the top of the tank. In addition, defendants Lance merely speculate, without providing any admissible evidence in support, that Tank No. 1 had a leak from the oil filter or a crack that could have exacerbated the spill and that said condition may have been known by defendants Hoffman and for which they may have been responsible. Summary judgment may not be defeated by mere speculation (see, Zuckerman v City of New York, 49 NY2d 557, 427 NYS2d 595 [1980]). The submissions by defendants Lance in their cross-motion likewise fail to raise an issue of fact with respect to defendants Hoffman. Therefore, defendants Hoffmans' motion is granted to the extent that the complaint is dismissed as against defendants Andy Hoffman and Andy Hoffman Burner Service, Inc.; the cross-claim of defendants Lance is dismissed; and the third-party complaint is dismissed in its entirety. However, the Court declines to impose sanctions pursuant to 22 NYCRR § 130-1.1 or to award defendants Hoffman costs and [*6]fees.
Regarding the cross-motions, the adduced evidence, particularly the deposition testimony of Rathgaber and plaintiff Lily Bergh demonstrate that defendants Lance did discharge oil onto the sidewalk in front of the store and from Tank No. 1 onto the basement floor on December 15, 1998. However, it is unclear whether defendants Lance, as the deliverer of the oil, set in motion the events which resulted in the discharge (see, Premier Natl. Bank v Effron Fuel Oil Co., a Div. of Meenan Oil Co., L.P., 182 Misc 2d 169, 698 NYS2d 434 [1999]; Domermuth Petroleum Equip. and Maintenance Corp. v Herzog & Hopkins, Inc., 111 AD2d 957, 490 NYS2d 54 [3d Dept 1985]). Defendants Lance are arguing for the first time that plaintiffs cannot hold defendants liable for the overfill of Tank No. 1 inasmuch as their damages were caused by pre-existing oil leaks which plaintiffs did not attempt to remedy. The owner of the property at which petroleum has been released may have a claim under the Navigation Law, provided such person did not cause or contribute to the contamination (Hjerpe v Globerman, 280 AD2d 646, 721 NYS2d 367 [2d Dept 2001]). Once it is established that the property owner caused or contributed to the spill, the property owner will be precluded from seeking indemnification from another discharger (id.).
The Vetter and Harris affidavits upon which defendants Lance rely are almost identical, are extremely vague and fail to specify which oil tank is being referred to. A review of the job file submissions and particularly a follow-up report from Harris and a letter dated May 28, 1999 from Cliff Ambrose, president of Ambrose, to the insurer of defendants Lance, reveal that the leaks, bucket, and stains involved Tank No. 2, which was not removed. Despite the vagueness of the affidavits themselves, the submissions of defendants Lance as a whole do raise issues of fact, including whether the cause of the damage was the act of defendants Lance in filling the oil tanks on December 15, 1998 or whether there were other possible sources of the spill, such as plaintiffs' acts or the pre-existing leaky condition of Tank No. 2 (see, Beth Israel Hosp. N. v Castle Oil Corp., 194 AD2d 499, 599 NYS2d 289 [1st Dept 1993]). In addition, the proffered proof, especially the contradictory testimony concerning plaintiff Lily Bergh's presence at the time of the subject oil delivery, raises questions of fact regarding the credibility of the parties such that neither plaintiffs nor defendants Lance are entitled to summary judgment (see, S.J. Capelin Assocs., Inc. v Globe Mfg. Corp., 34 NY2d 338, 357 NYS2d 478 [1974]).
Accordingly, the motion of defendants Hoffman is granted solely to the extent that the complaint is dismissed as against defendants Andy Hoffman and Andy Hoffman Burner Service, Inc.; the cross-claim of defendants Lance is dismissed; and the third-party complaint is dismissed in its entirety. The cross-motions by plaintiffs and defendants Lance for summary judgment are denied.
Dated:___________________ _______________________________________
[*7]
J.S.C.
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